Inspired by Europe’s hostels, this Delhi-based couple started goStops and grew it to a turnover of Rs 10 Cr

Millennials constitute 34 percent or one-third of the Indian population, and they love to travel. Be it accommodation or other preferences, they are an important segment that startups are targeting with innovative ideas.

To cater to this demographic of tech-savvy travellers, Delhi-based couple Pallavi Agarwal and Pankaj Parwanda pulled all stops to offer hostel facilities across different locations in India with startup goStops.

Started in 2013, goStops is a full-stack youth hostel company. It leases, manages, franchises real estate assets, which are then designed, transformed, marketed, sold, and operated as youth hostels in business and leisure locations preferred by millennials. About 70 percent of its inventory consists of dormitories, and 30 percent constitutes private rooms.

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A ‘journey’ that started it up

In 2012, Pallavi, Co-founder and CEO, and her husband Pankaj, Co-founder and Director, went backpacking across Europe and came back fascinated by the hostel culture there. Why a similar model for travellers looking for premium quality social accommodations at an affordable price didn’t exist in India was the first thing that crossed their minds.

“Back then, there was no accommodation in the Rs 400 to Rs 800 range in the Indian market, which catered to the needs of young Indians. With this in mind, and a love for creating social spaces, I opened the first goStops hostel (then called Stops) at Varanasi in 2013,” Pallavi says.

According to Pallavi, Varanasi was their first choice to open the hostel because the city attracts both foreigners and Indians equally. Six months after the business started, Pankaj quit his job.

How co-living at a hostel struck a chord

“Currently, we operate 13 hostels in Agra, Amritsar, Bir, Dalhousie, Delhi, Jaipur, Jaisalmer, Mumbai, Naggar, Rishikesh, Udaipur, and Varanasi, with a total capacity of 800 beds across India. Our annual turnover is about Rs 10 crore. We have grown 2.5 X each year continuously for the past two years,” Pankaj says.

The couple claim they get 6,000 customers every month across its 13 properties, of which about 55 percent are Indians and 45 percent are foreigners.

For millennials by millennials

Pallavi graduated in economics from Kamla Nehru College (Delhi University) in 2003. In 2004, she started as a consultant with The Smart Cube, where she gained expertise in industrial and monetary services. She did Master’s from the International Management Institute in 2007, and later worked at Tata Capital, MNC Millward Brown, and Quantum Consumer Solutions. 

Pankaj is a BE in Electronics and Communication Engineering from Manipal Institute of Technology in Karnataka (2006), and is the brain behind the startup. He had earlier worked at Nokia, ZTE, Huawei, and Ericsson. Having done the corporate route, the couple was ready to give entrepreneurship a chance with this travel-inspired idea… and have since struck gold.

The individuals working at goStops are themselves millennials who understand the ethos of the age group they cater to, Pallavi adds. The co-founders and senior management are all in their mid-30s, and the rest of the team belongs to Gen Y and Gen Z. Today, the startup has a 25-member team across product and operations, sales and marketing, business development and support functions. 

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Competition and a ‘unique’ revenue model

Though there are a couple of hostel startups in India, the startup claims there are no direct competitors as goStops business model is quite unique.

“Our major chunk of revenue comes from selling bed inventory on our official website and through various online travel platforms (HostelWorld, goMMT, goibibo, etc). A minor chunk comes from in-house cafe sales and selling experience-based packages such as day tours, walking tours, etc,” Pallavi says, which was another lesson they learnt in Europe where walking tours are very popular.

The bootstrapped startup also raised an undisclosed angel funding in the second week of November 2019 from some prominent angel investors in India - Nitish Mittersain (founder and MD of Nazara Technologies), Sorabh Agarwal (ex-MD at Copal Partners), Sameer Walia (founder and ex-MD at The Smart Cube), Rohit Shankar (co-founder of Dimdim.com), Sunil Kumar Singhvi (owner of South Handlooms) and other senior corporates.

The hostel just got hip

“All our properties are listed on the website as well as on various travel booking sites such as booking.com, HostelWorld, MakeMyTrip, etc. One can make a booking directly through these sites, or call our customer care division (via an IVR number) and book,” Pallavi explains.

Customers can click on short stay, long stay and experiential options on their website. Once the guests make a booking, they can check-in at the properties, and avail diverse services at the hostels. Services offered include 24x7 security, 24x7 front desk, A/C, Wi-Fi, space for co-work, housekeeping, recreational zones, in-house cafe, tuck shop, mini-amphitheatre, mini-library, events and activities, etc.

The startup now plans to expand its footprint across India by doubling bed capacity to 1,600 in the next 12 months. “We also plan to utilise recently-raised funds to enhance our product offerings through investments in technology and training, add new revenue streams, strengthen marketing and build a team to handle the next phase of growth,” Pankaj says.

(Edited by Suruchi Kapur Gomes)

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